Open Innovation Initiatives

Tomoya Hiroe

VP Operations, Stuff Co. Ltd.

Stuff Co. Ltd. has actively pursued development
initiatives using Open Innovation since 2016. We
approach our startup and Open Innovation initiatives withthe following three perspectives.
The first is that we use external intellectual property
and create businesses and products in-house.
The second is that we use internal awards to turnbudgeted plans into businesses and products working withexternal companies.
And finally, the third is that there are things we cannot
develop ourselves for various reasons, but with support
from other enterprises, we can make something of ourideas.
For the first one, we take a unique idea or technologythat a startup or university has, and make it into a productusing the branding and commercialization capabilities andthe sales channels of a large enterprise. For the second,
we take a plan created with our own expertise and use it
for marketing or with another company’s technology tocommercialize a product. And for the third, when you
have internal obstacles so that even though your idea
is strong, it does not suit your company, you can makesomething of it with support from another enterprise.
Here, we introduce some of our successes with each ofthese patterns (See Figure).
As an example of the first case above, we createda STUFF product called “TISPY,” that came from aToshiba internal startup. The product (currently being soldas TISPY2) is a blood-alcohol level checker that learns
using a memory card with Wi-Fi function from Toshiba.
■ Figure : C reated products
From the left: Kitoki, TISPY, INFINI MIX

6New Breeze Spring 2022

This project was a voluntary startup within Toshiba,
which we joined in February 2016, combining professional
software and hardware development and design members
from Toshiba with our product creation capabilities.
We began crowd funding in March 2016, and sent a
product to our supporters in autumn of that year. When
we joined the project, Toshiba had already decided to use
crowd funding to get support and created the web page,planning to make 3000 units. It was difficult to create aToshiba branded product with this number of units, soafter some compromise, we finally created the product,
raising 15M yen of funding. We collaborated with LifeCare Giken Inc. for tests to evaluate effectiveness of theproduct. There were some heated discussions and someconflict of personalities before we arrived at a product,
but we continued to pursue the goal and finally achieved aproduct in quite a short amount of time.
An example of the second case, is a vital sensing device
made of wood, called “kitoki,” which is being sold throughOpen Innovation with JT. We participated in this projectfrom the planning stages, studying the product value andconcept and designing it in a group of four companies,
with JT, a design company called we+, MIS (Makuake),and our company, STUFF. We produced a new idea
combining a range of research knowledge from JT, thedesign capabilities of we+, MIS’s vision for value, andSTUFF’s technical and product-development capabilities.
By forming a team to realize that idea, we reached acommon understanding of our objective. Through Open
Innovation, we created a product in only 11 months fromthe start of planning, and with Makuake we were able toraise over 10 million yen.
A final example is the INFINI MIX product from
Mitsubachi Products, which is currently on the market.
Mitsubachi Products is a startup that was carved outof a major enterprise. Mitsubachi Products’ goal was toproduce value based on the main themes of “buildinga chocolate-drink culture,” and “hot chocolate drinkmachines.” We collaborated with them on developing andmanufacturing these machines. We were introduced toCEO Hatsumi Ura by Makuake, and were allowed to joinfrom the planning stages. This is the first product of its
kind, so there were many hurdles to overcome in creatingthe product.
Two major points stay with me from these experiences.
The first is that we only joined the project in the spring of2018, but after we decided to exhibit at Salon du Chocolat
in France in the autumn of that year, we were able torealize a usable product from the design concept in only
about two months. The second is how I could relatewith the Mitsubachi Products sentiment that, while theywanted to introduce a product to the world, they also
wanted to create a new food culture at the same time.
In all cases, we would not have been able to create
the products on our own efforts alone. They started
with a plan from a startup or a large enterprise, and wereimplemented by gathering together various strengths,
whether technical, research data, parts processing orprocurement, design or sales. Gathering together many
strengths to proceed is what makes Open Innovation able
to speed up the product development process.
Looking back now, each of these initiatives also had aturning point.
For TISPY, the Toshiba internal startup was formedin December, 2015, when we had our first consultation.
It is embarrassing to say, but it was our first experience
with crowd funding, with a startup, and with Open
Innovation when we started at the time. We launchedanyway, and although there was much we did not know
and were experiencing for the first time, we did not takean attitude that delivery delays were inevitable, as is often
the case with crowd-funding projects. We had a sharedunderstanding that we would proceed with development
and production as planned, and this was a major pointin our success. However, as is often the case for a startup
within a large enterprise, members are often required to do
two things at the same time during development, and thiswas also true for TISPY. The two things were “everydaybusiness” and “TISPY development.” Because of this,things progressed smoothly through design part of productdevelopment but then, when studying specifications anddeveloping the software, we often could not contact thepeople involved until the evening, so development took
more time than usual.
Reflecting on the results, this was a major issue in thefact that we shipped one month later than our originalplan.
Learning from this experience, when developing kitoki
in the second initiative, with JT, we set a rule in the project
team that we would not start crowd-funding until theprototype product was completed. Thus, we were able tocontrol the product production volume, which is one of thebenefits of crowd funding. When we developed TISPY,
we did not even have a working mock-up on hand when
we started. Thinking about that now, it was a terrible
thing to do.
Incidentally, we have heard that Makuake has also

had a similar experience, so now when they use crowd
funding, they have a rule that they must have variousconceptual prototypes completed already when starting a
crowd funding project.
Returning to discussion of kitoki development,a major product planning issue was how to generateuser experience value. The product was intended to bea “vital sensing device,” which raised the question of
how to measure one’s state of excitement or relaxation,and how to induce a relaxed state. We settled on anarrangement that senses perspiration on the user’s handand promotes relaxation using an original algorithm withvibration sensations. During development there was muchdiscussion back and forth and we completed the product in
11 months.
The f inal example is of the INFINIMIX hot
chocolate machine, created by Mitsubachi Products.
Mitsubachi Products President, Hatsumi Ura, has abusiness background, so we provided technical expertise.
Mitsubachi Products handled marketing and sales, while
STUFF handled development and manufacturing. When
we started development, there were already plans to exhibit
at a trade show in Paris and to give a presentation at a
Panasonic 100th Anniversary event, so we began withthose plans in mind. Development was organized withmembers from Mitsubachi Products handling productdesign, while we handled design of circuits, software,structure and enclosure, fabrication and evaluation of
prototypes, and later, assembly, manufacturing, packaging
and shipping for mass production. The design wascompleted in August, 2018, and the Paris exhibition was at
the end of October. Looking back, I realize what a toughjob that was. However, having those plans in place was
the best motivation we could have had, and we were able
to exhibit the product at the trade show and the event in
December, and also to refine the drinks further.
The value of our experience with Open Innovation
is increasing as we receive many development proposals
recently, and having learned how to quickly clarify theproduct creation process is an important factor in being
able to respond quickly. Thus, through many projects,
we have learned that with Open Innovation, making
an absolutely firm schedule during the early stages ofdevelopment is a very important task.
A second important task is to clarify the costs.
Our company takes on many product development
contracts from other companies, with various requirements
such as development and consulting on basic prototypesfor verifying specifications, studying products emphasizing
appearance from the designer’s perspective, developing
devices incorporating multiple sensor modules, anddeveloping products that require various certifications forcommercialization.
For many development consultations, clients have

New Breeze Spring 2022

7

jumped the gun starting development without having
considered the specifications thoroughly, but with ourdesign partners that have not considered the overall costs,
we try to create good products by considering customer
needs over a broad scope. I do not think this approachis wrong, but in many cases, not much thought is given
to costs. As a result, time considering specifications canincrease greatly, which can inflate costs. It also means thatmany projects are not able to satisfy both their content andtheir costs, they do not have capacity to make the rightjudgments in real time, and in the end they need to takea different direction than originally intended, such as rethinking or suspending development. Even in the rarecases that they move to the next development phase, it islikely that they will need to reconsider their budgeting.
For these reasons, it is important to disclose as early as
possible and to the extent possible, the overall budget, thedevelopment budget, and plans for procuring funding, andwhat has been decided with business partners. This is thesecond task and has benefits for both parties.
And finally, a third task: to make responsibilities clear.
To avoid misunderstanding, this is not leaving decisions
to others at all. With Open Innovation, it often gives
partners a point of contact in a joint project. If each partner
involved in development takes responsibility for its own
tasks, there will be less chance of diverging from theschedule or costs as discussed above.
These are three fundamental issues for startups andOpen Innovation initiatives, but they are often forgotten
and members often proceed as with regular business in alarge enterprise.
With startups, people’s hopes and visions often expand
during discussion, and they run too far ahead and forgettake a stance in terms of cooperative Open Innovation.
When this happens it is difficult to pull back, so it is betterto be mindful of this at all times.
These are basic issues and it is important to think about
them from the very beginning.
Another extremely important task is selecting partners
to work with.
We are a design company, handling everything fromsoftware, hardware and structure to product enclosures,
both in-house and outsourcing, so we have a networkof hundreds of designers, other design companies,and fabricators from prototyping to mass production.
We receive thousands of inquiries per year, and workwith partners to optimize each design phase, solving
development problems and working to accelerate theseprocesses.
Our company could be the “best match” in somecases, but if the customer can use their own resources ortheir existing network, they could ask other companies tohandle individual aspects such as design, prototyping, or
mass production of the product.
8New Breeze Spring 2022

I have described some of our experiences, based on
concrete cases that we have worked on, but we normally
try to collaborate with partners that we can exchange
views with at trade shows or through web research, so it iseasy to form a development arrangement and development
proceeds smoothly.
I have one final point to mention.
When kicking-off a development project, it is necessary
to have details such as level of quality required, evaluation,and certification decided and assigned among partners toa certain degree. This point is sometimes omitted, but it
is extremely important, since it can determine whether theproduct turns out well or not.
If the enterprises, departments or partners haveexperience producing products, they will each bring
their own information to the project, I can recommend
engaging in Open Innovation, taking these points intoconsideration.
However, even if the issues described above arehandled smoothly, projects are not guaranteed to go well,and when introducing a product that has not been on themarket before, it may be difficult to attain the certificationand quality standards that people expect from Japan.
We have also had several cases where we evaluatedprototypes, but encountered major obstacles when moving
to mass production, and this highlights the difficulty ofcreating products, for a startup or an established enterprise.
There are many plans to execute, mainly from internal
startups and pitch events in large corporations, but afterawards are won and budgets created, there are still many
issues before a product is created, such as profitability andstandards, and many initiatives do not achieve productsuccess. Above all is the inherent difficulty of starting a
new business from the bottom up. Every enterprise has its
own way of thinking, but by taking care of fundamentals
and carefully selecting project members as I have discussed
earlier they should be able to continue development
without stopping,.
There is much support for startups from the various
regions, prefectures and national agencies, and weshould expect even more in the future, but it is not anexaggeration to say that whether an organization orenterprise can make a product or not will be determined by
how they think about it.
In addition to the above examples, we have createdproducts with many universities, agencies, large enterprises
and startups. For these accomplishments and activities, we
had the great honor of being recognized and awarded thefirst Ministry of Internal Affairs and Communications
Open Innovation Prize in 2019. We are very thankful to
all involved for this recognition of our methods, and wehope to promote even more activity in Open Innovationand produce more successful experiences.